I really have to apologize for leaving you guys hanging on the first part of this story. I was undecided on whether or not to break the article up into 2’s and after some feedback on Twitter I decided to. Below are the middle and the ending. Again, I was undecided on whether or not to break this part up but I left it whole. There are 23 paragraphs, double the original. If you’re not sure what I’m talking about, this is the 2nd part on a story I posted yesterday. You can view the original here. By the way, this is the first time I’ve ever told this full story.

Let me clarify that because the tracking information said the order came on a Thursday I had to take the day off from school. My mum left for work at 6:00am and I’d usually get a lift to and from school with my mate so my sisters didn’t know I was taking the day off. That afternoon, the first home were my sisters. They got in and were confused as to why I had a room full of MP3 players. Being a cool brother (ha!) I gave them both an MP3 player for free. My mum got home at 5:00pm and I was hesitant to tell her I gambled away my savings. I showed her my order and the look on her face was one of shock, excitement and nervousness. I reassured her that I’d be fine and hopefully they’d be packed and posted to customers within a month or two. Turns out my estimations were wrong.

It took me little time to put the first product on eBay. I remember my dinner getting cold that night because I was listing items for sale on eBay. I started off with 1 of each color for sale. There were 6 colors: Pink, Green, Silver, Blue, Black and Orange and all were listed for $49.95. I went to bed that night feeling exactly like my mother’s first reaction: excitement and nervousness. Would I see a sale before the end of the week? Would anyone even buy them from me? I had my doubts.

My alarm went off at 6:00am, though I was already awake. I logged into my eBay account and saw several messages and alerts. Investigating further I noticed that I now only had 1 item for sale – an orange MP3 player. Overnight, in the space of 12 hours I had sold 5 products making me almost $250.00 while I was sleeping. Let me just put this amount into perspective to 16 year old me. I worked 8 hours a day, 5 days a week to make $260.00. Overnight… while I was sleeping… I had almost made this amount. As you can imagine I was ecstatic. Because I got up at 6:00am and my lift to school didn’t arrive until 8:50am I had several hours to do my thing.

It took me a total of 8 days to recoup my original investment. After this I began to get into a routine over the next few weeks. The afternoons would consist of listing new items on eBay, preparing the products to be posted, printing out invoices, managing payments, communicating with customers and walking down to the post office to post several parcels. The post office was around 1km away so I would pride myself on quick postage times. If a customer purchased one of my products and paid for it before 4pm on a business day, I’d post the item the same day. Inevitably, I began to get to know the lady at the post office really well. I remember she gave me access to bulk postage parcels to save me some money one day. If I remember correctly the parcels retailed at around $1.20 each and she sold me 100 for $80.00 – every little bit helped.

I placed my second order on the last day of October. I still had a few products to sell but by the time the 2nd order arrived they should be long gone. By this time I tried to make my setup a bit more professional. I bought a proper printer that could print out invoices and order information extremely fast. I purchased a paper shredder and was using shredded paper as cushioning for the MP3 cases. I had a logo designed through Freelancer.com (formerly GetAFreelancer.com) which you can view here. Off memory the logo only cost me $50.00. I also convinced my mum to co-sign a BlackBerry Bold 9000 for me “for business”. I say “for business” in quotation marks simply because I think I just wanted a cool looking phone which had internet access. The good thing about having a cell phone with an internet connection is that I could receive emails while I was at school or out and about. I remember sitting in class one day after setting up emails on my phone and all mobiles had to be on silent or vibrate. Literally, every 5 minutes I could feel my phone vibrate. The emails were either “Your Item Sold” emails from eBay or “Notification of an Instant Payment” from PayPal.

There wasn’t much time left until school broke up for the Christmas holidays and I certainly needed a break. I knew things were getting a bit chaotic when I was signing documents worth thousands of dollars and authorizing deliveries which meant having crates of electronics being delivered to my tiny house. Not only this, but my recess and lunch breaks at school were basically me sitting in the library processing orders. One of my mother’s jobs was working at the school so she was able to get me administrators access to the schools internet which basically meant eBay & PayPal were unblocked (school internet access being filtered sucked).

With both eBay and my friends bringing me customers I was earning a lot more than I ever expected. While I never hit 5 figures in revenue per day, I was doing it on a weekly basis. What I find incredible now is that I had created this little business with only 1 product. Sounds good now, but it started to make me a little paranoid back then. I wanted to expand my product line. It was only a few days before Christmas so I thought I’d do some research and development the day or two after Christmas thinking that they’d be slow sales days (I was wrong by the way). I didn’t get a chance to work on a new product until mid-January, but that would be too late.

The New Year started out really well. For 2009 I was on track to hit one of my financial goals by the end of the year which was to become a millionaire while I was still a teenager (I still have time left for this by the way & it is still a goal of mine) and this motivated me even more. What was going to get me there quicker was to expand my line. I did research into growing markets and trends. I looked into manufacturing prices and retail prices. If I was to start a new product now, I’d probably follow the same procedure though it would be more efficient now (you know, older and wiser…). The result was an 8GB USB Drive. This is a link to what the finished product would look like. I’ve still got my marketing plan with me which comes with a funny story.

Let me quickly tell you a funny story about my marketing plan. This is for the people who think that working all the time on a business would affect your grades. Same year, 2009 and I was studying Business at school. My business studies teacher gave everyone a task which counted for 50% of our overall mark – a crazy thing to do. The task, ironically, was to create a marketing plan for a new product. Me, just finishing up development of this USB drive simply handed in my real marketing plan. It’s 13 pages long and talks about market demographics, needs, trends, keys to success, product positioning, sales forecasts and the list goes on. I ended up handing it in and turns out I got 20/20. I’ve scanned the front page and you can view it here.

Anyway back to the story. According to my sales forecast, this new product was going to inject a lot more growth into my business. Using forecasts similar to the MP3 Players, I forecast sales of 13,000 units the first year which turned out to be $415,500 in revenue. I was going to use a cost-based pricing method and the total price per unit was going to be $30.00 – a lot cheaper than competitors. Back then, 8GB USB drives were retailing in stores for close to $100.00. I like to think that my product had a direct effect on the market, but that’s just me dreaming. After talking with distributors about in-store placement of my product, I decided that along with the physical 8GB USB drive that the device also comes with 8GB of storage in the cloud – something that could probably work out alright now. Again, this was all a waste of time but I didn’t know it yet. I used my same supplier in Shenzhen, China to manufacture my USB drives. I submitted a small order to test the waters and they arrived just in time for a phone call I received.

I can’t remember the exact date, but it was in February. I was sitting in my elective which was IPT, a class which stood for Information, Processes & Technology. My phone started to ring during the middle of a lecture, something I had gotten used to after publicly putting my phone number on my eBay page (NEVER. AGAIN.) Usually customers don’t leave voicemails but this person did so I decided to check it. It was a reporter from a Rupert Murdoch owned news website called News.com.au – one of, if not the most popular news website in Australia. She left a brief message and then sent an email. I actually have the email printed out so I’ll scan it and you can view it here – I just edited out some information.

The email basically says they want to run a story on “young entrepreneurs” and somehow they got my information (maybe they hacked my email or something? Kidding.) I thought this could be a good opportunity to get some contacts, maybe push my business into stores faster, get the brand out there, I don’t know. That afternoon I realized two things: 1, I’ll be networking with reporters and other “entrepreneurs” and I don’t have business cards and 2, if I want to convert this exposure to money I’m going to need a website. I didn’t think linking to my eBay page would fly. I had my designer put together a business card design which I still have (click here for the design) and had them printed out very quickly. I needed the cards within a few days and it was a bit difficult to get them done that fast – looking back I shouldn’t have tried to act all pro and just go in the way I am. I ordered 1,000 cards and still have about 950 of them to this day. Anyone want some?! For the website design I simply bought a template and integrated it with osCommerce – I honestly didn’t want one or need one so it was just for show really. I don’t have a copy of the design and thewaybackmachine isn’t showing much – sorry!

I went into the interview and had an alright time. Spending a whole day outside of school and work was a bit challenging – I didn’t want to fall behind on either so I was a bit reluctant to go, plus I had no way of getting there. My dad ended up taking me. He’s a shift worker so he worked from 11:00pm till 7:00am and then drove 90 minutes to the interview. He was so tired that he ended up sleeping in the car for the 4-6 hours I was in doing the interview. This was the first time I was interviewed so I was a bit nervous having a camera shoved in my face and told to talk. They wanted us to talk about the Global Financial Crisis, which to be honest I didn’t want to talk about. To me this was a simple plug-the-shit-out-of-my-business-as-much-as-possible event.

The day ended with a request for me and two other of the “young entrepreneurs” to go on Sky Business and talk about the GFC in more detail on live TV. FUCK THAT. I said no and went on my way. Just to note that I’ve done live TV interviews since then – not too scary, but I was still shitting bricks. I was told that the article would go live soon and I’d be contacted when it does. I was excited to see what this could do for my business.

The article went live on February 18th. As you can imagine things were taken out of context and the topic shifted dramatically. You can see the article here. They’ve removed all but 1 of the comments. When the article was live it amassed hundreds of comments and brought out the haters and trolls. I remember printing out the article and having 1 page of content and tens of pages of comments ripping the shit out of us – mainly myself. Some were sort of right saying “2 products isn’t a business” but that’s an argument for another post.

The article didn’t get me down. I continued selling on eBay; the MP3 Players were still selling like hot cakes, even after Christmas which was a good thing. Week after week I was seeing increases in revenue. By this time I’ve made several big orders with my supplier and had built up a good relationship with the representative I was dealing with – I still talk to her today. Shout out to Ferry! I had plans on making huge orders which took up a lot of time so promoting the new USB drive and trying to organize distribution was put on hold. I was close to ordering a shipping container of USB drives. Close…

March was almost upon me. March 1st is my birthday and I was turning 17. I wanted to go on a holiday and take my family with me. Money wasn’t really a factor to me then as I had been making enough to support myself if need be. Then came the phone call. I was sitting in the computer room at school at lunch time doing what I usually do, processing orders, chatting with my supplier and my phone starts ringing with an unusual number on the caller ID. It was a man who claimed to be from a law firm representing a major business in the MP3 industry. The similarity between my MP3 Player and this company’s product was too close. I had to cease operations immediately or be sued. I couldn’t take another order, I couldn’t accept any more payments, and I couldn’t even trade under the same name. I still remember the voice saying “Client is not happy.” – replace the world client with the company’s name.

Wow. Can you imagine how I felt when I got off the phone? My stomach dropped, I started to sweat and I was utterly… confused. On the computer screen were orders and legally, I couldn’t touch them from now on. The past 7 months of my life gone. I remember coming home, walking into my room and just laying down and staring at the roof for hours, just thinking about what I was to do. I was a 16 year old in too deep.

I came to the conclusion that I wasn’t going to give up that easy and I went to see a lawyer. I figured I had enough money to present a decent battle – how wrong I was. I told the lawyer my story and what the situation was and the consensus was not good. Give up. I was told I could not win. Regardless of if I had a case or not, fighting a company this size was not worth it. Nowadays I can agree with what the guy was saying but being told to give up hit me hard.

For the rest of the year I was pretty quiet in the business world. I focused majority of my time at school though I did have a few ventures that I ran with (out of the retail sector) that did okay which (if there’s any interest) I can make a post about later. To this very day I still have MP3 players lying around and shitloads of USB drives that I never got the chance to sell and are pretty redundant right now.

If given the opportunity would I of done things differently now knowing what I know? Yep. Did I learn a lot from this experience? Yep. Did I make a lot of money and then lose a lot of money? Yep. Would I have gotten my ass handed to me on a gold platter if I went to court against the company? Hell yes. Do I regret doing any of it? Nope.

Haha that story sounds like every kids movie ever made, congrats on a sterling start to what will no doubt be a long and prosperous business career!
I'm still a little unclear as to how you *lost* the money though. Is it just because you had so much capital tied up in stock that you could no longer move?
You should have gone on AliBaba and sold them wholesale to someone else ;)
Great post, very intriguing stuff and well written.

They featured my business name which I was no longer able to trade under. I suppose I could of re-branded and started again with just the USB's but I think I was too drained to do anything else in that industry. :P

"Why couldn’t you sell the USB drives?"
I'm assuming that the "small order" wasn't worth the hassle of offloading.
Either that, or he was taking seriously the demand that he "couldn’t even trade under the same name", and the USB drives do feature his brand name rather prominently...

Your comment is true. As mentioned above, I was both physically and mentally drained at that point and the "small order" wasn't worth offloading, plus they featured my business name which I could no longer trade under. Thanks for reading!

Yeah am I missing something? Where did the losing lots of money part come in. Did the company actually sue you then or are you saying that because you were unable to sell more music players that was a loss of revenue? Just wondering.

Sorry, I didn't go into much detail about the money I lost. It was mainly due to not being able to sell stock, plus their were lawyers fees and all that shit but that was nothing compared to the price of the products.

You should go back to school and learn to read, speak and most importantly, write properly. This was painful to read, and not because the story is all that engaging (it isn't). Also: hubris does not look good on you.

Woah... looks like someone still doesn't appreciate your work affecting that company.
I appreciate your stories Mat, and well-written or not (it's quite colloquial and playful), and help young teenage entrepreneurs learn about business in a global economy. I believe that themes we can learn from this story are dedication, work ethic, and finally, knowing how to quit.
I applaud your work, your blog has gone into my RSS feed (and bookmarks), and hope you continue writing.

the nerve of this "educator"... I wonder what personal insights you could provide for the business world. if so, make your own blog and mind your business! Thanks again Mat for taking the time to share your story.

@ AConcernedEducator: You are a douche bag. Instead of counting the grammatical errors you should have listened to the story....because he was educating the world freely... unlike you who does it for an income. Mat took you ant the whole world to school in business for free....without the assistance of your overpaid lectures. You made need to sell products like this in the near future, since word processors from "the same client" and the Khan academy will be putting you and your colleagues in the unemployment line soon. So what you should be concerned about is commerce and not your fucking commas.

Very, very interesting to read. When I saw the number: $415,500, my eyes where really, really huge. I was like "WHAT?!"
I am wondering though, like most others here. Obviously the MP3 looked a lot like those of but what about the USB Drives?

I love your story man and I can completely relate. My startups may not have been as successful as yours, but I've had two occasions where legal problems killed my business as well. One of them even involved a police raid on peoples houses because of an internet site.
One thing I can tell you is this: don't ever let a legal battle put you down. Rebrand and reassess your strategy. As for the MP3 players, you could have just bought non removable domed stickers and sold them under a different brand name.
Even now, 12 years later, I ran into the same problem again. One of our competitors registered our brand in the US the moment we went international, and decided to start legal proceedings. However, unlike before, we now have the capital to fight it and they're starting to crumble already.
As an entrepreneur, you basically have to be a legal expert. Start reading up and take some classes. Since I've done that, I have started to notice that a lot of lawyers like to bluff people into submission because they know that people don't actually know what is going on. Learn the basic principles and you will be much better prepared against this kind of thing.
I'd love to hear more about your new ventures, make some posts about them :)

Thanks for the comment Rogier. I agree that you should take classes, learn every aspect of your business. At the time I was doing Legal Studies at school, but nothing along the lines of trademark infringement, copyright and all that sort of stuff.
It's good to read that you're doing well now. Keep up the good work and feel free to email or tweet me if you want to have a chat.

Maybe I'm missing something, but I don't understand why you didn't go to another supplier with a different product, or have your current supplier redesign whatever part of their product design was pissing off the big company. Then start with a new ebay account, and youre off.
Like someone else mentioned what about selling the held inventory to someone else at a whole sale price, or just selling the remainder physically? Tons of stuff on ebay is fake, but business goes on.
Anyway, congrats on an impressive first start in business, more success will surely come your way, and Australia is booming right now so get it while the getting is good. When I was your age I was more concerned with rock & roll my and penis size (still am).

Good to hear Cher is concerned about her penis size. Looking back, I could of re-branded and started again like you mentioned but as I've said above in the comments, I think I was too drained to do anything else in the industry.

To all who asked why the guy couldn't sell the USB, did you guys miss the part of cease and desist that prevented him from operating under the business name, while a truck-load of USBs had that name printed on them? Well, it's there, in the article.
Cheers

Hey Mat:
I can tell you something. You are a winner. You did things that taught you lessons you could not get from any school. First of all do not pay with WU someone you never dealt with. You could've lost all your first investment. Then I think you kinda hit the jackpot when you found the right manufacturer in Shenzen. Many are fake companies. You still had the nerve/determination or the lack of knowledge and experience to move ahead with that company. Always try to avoid litigation. Only lawyers make money. I wish you good luck with any business you will tackle. You will be OK. You know how and what to do in import, marketing, sales, and market study. If you want to start something again and need a hand let me know. We will chat outside this forum.

Hi Hedi, thanks for the compliments. Agree about Western Union - it's not my preferred payment method but if people need to use it, make sure to do your due diligence. If you want to chat, send me an email or a tweet. Cheers.

Hi Mat,
First of all, great article. I loved reading it. It has inspired me and I am really impressed by how pro-active you were to chase a dollar (and then some). I just discovered your blog today on HackerNews and as a young kid myself (19 and in college), I was wondering what you think about Affiliate Marketing. Is it watered out?
Also, is it still possible to pursue what you did in 20082009, now in 2011? Typing Alibaba into Google gives me instant results such as "fraud" and "scam". I did some digging and realized that most of them come to Fuijan Province. Do you think it is still possible to profit off of the same hustlingentrepreneurial venture you pursued if it was done today?
Sorry for so many questions... I am just really interested in your responses and valuable experiences.

Hi Teddy, thanks for the questions, always happen to answer. I've been doing affiliate marketing for the best part of 12 months and it's working fine for me. Granted it's not as easy to make a buck these days as it was several years ago when Adwords, FB Ads weren't as strict but I don't think it's watered out. Find a great niche and you can still make a lot of money.
Doing what I did in '08 today? I mean, it's possible; the rewards wouldn't be the same but I think you could make some spare change even if you just do it at local markets and other offline events. The digital storage market has changed a lot since '08. Here in Australia you can get a 2TB external hard drive for $98.00 and I was selling 8GB for $30.00 back in the day - you can see the difference.
I think you could choose a different niche and follow the basic guidelines I did and again, you could make some side moolah. I remember hearing a story about a guy who bought scientific calculators off of Alibaba and selling them to his school friends because the school overcharged for them.
Their are other sites besides Alibaba that I've found to be better. Just to name a few: Liquidation.com for larger orders and thewholesaleforums.co.uk for more niche related products.
Hope this helps.

Hi Mat,
That was a great story! I'm 24, and had quit my boring job some month ago to try to start my own business. It's great and refreshing to read such blog post!
I'm pretty sure you could share some other cool business stories within a few month or years!
Keep up the great job!
Nicolas

Props, for diving in. I hadn't seen the mp3 player until I finished the article but I felt that it would look like what it looked like coming from China. With your experience you'll be importing stuff again in the future!

Awesome story, I love both parts! They were both well written (Dunno what "AConcernedEducator" was talking about--and really, come on dude) and I learned a lot. Looking forward to more articles soon--I subscribed, so I'll be around ;)
P.S.
Major points for answering the same questions again and again in the comments. Dunno if I'd have the patience!

this was really inspirational despite the ending. And I thought the quality of writing was fine, despite what one (and only one of many commenters) said.
The company that I'm guessing is Apple (since your MP3 players looks like what I remember the early shuffles looking like) saying you couldn't trade under that name anymore sounds like a ridiculous demand that I really doubt would have stood up in court (though I'm not a lawyer).
I'd like to think if I was you in that situation I would have stopped selling the mp3 players, but would have went ahead with the USB memory cards plan. Saying that I've never had the guts and imagination to do anything like what you've done in this story, so I'm aware I have a cheek to criticise.

Mat,
I think you did a good job for that age. However, I am quite disappointed you gave up. Eventually you would have shifted to another business. Think of what you would have done next and do it. You obviously have the game for this. Open your next business now

great story! I bookmarked your blog, cant wait to see what business you're gonna do next. I want to get a toy made in China. What's the chances that they wil have it knocked off? When I browse the site it seems like many sellers have access to the same types of items in brands and designs.

Hi Lily, thanks for reading. I'm not sure what you mean by "knocked off". If you wanted to have a chat about manufacturing in China, send us an email through the contact form on this site or send me a tweet. Cheers.

Excellent article.. But my question you can contact your supplier who supplied you the mp3s rite? Because you are not the manufacturer.
I am really inspired from the article and I am 25 year old now.. I am now not recharged with this article and I will start implementing my ideas..

Hey Mat,
This was such a damn good read!
I bet i have never read such a good post before! Damn, it was so intriguing, that even Shoemoney can't write such. Maximal thumbs up for you!
I am actually a teenager, who wanders the internet *since the age of 14*, for the ways of making money online.
Currently i am sixteen yrs old, and have a decent (but minimal) 4-digit $ monthly income, without a "business".
I am following you Mat, and all your activity for a year now, and truth to be said, i am really impressed by your business ideas.
If ever, you will be looking for a partner in any upcoming project of yours, i would be very glad to help you with it.
Cheers and All the best to you,
Sincerely, Stelian Subotin

Dear Matt
Great story and guts for writing it, gripping read and even though the venture wasn't ultimately successful - as Robert Kiyosaki, of Rich Dad Poor Dad says learning through failure the key, almost all v successful people go through this, his other book before you leave your job has guidelines including legal on business success. I am sure you will be v successful.
Cheers

Matt,
Just ran across your website while looking for inspiration for a logo I am creating. Here is a little bit about myself for your enjoyment.
I am a 30 year old graphic designer/web developer and have my MBA (Masters of Business Administration). I've read your post, and I agree with many of your other comments here that call your story inspiring. Finding and figuring out a way to meet the demands of the general consumer is a tough nut to crack, but you found it.
At your age, I wouldn't have had the drive and determination it takes to succeed in business like you have shown the ability to do. However, there are a few things that you should know.
#1. When a company threatens to sue, you need to research the patents and see if there are any active patents on the design / packaging / etc of the product in question. Look at all the MP3 players on the market today, and look at how many from different companies look pretty much identical.
This is a tactic used by large corporations, such as Sony and other companies, to try and 'scare' the novice business person into relinquishing their foothold in the industry. You being such a young age at the time, made it easier for them to do so but it's not always legal. You're lawyer you visited is correct in the 'give-up' advice however, and the reason for that is because even if you had decided to let them take you to court and they didn't have any active patents they're large companies and have a lot of lawyers and a lot of money. What all this means is, simple litigation is out of the question, and they'll counter everything you bring to the table by sticking what is known as 'red tape' onto it, keeping you in litigation for years.
#2. Unless you were actually sued, and the courts themselves tell you that you cannot operate under your business name you are lawfully able to do so. Whether you sell a product that looks or behaves similar to some other companies product or not. The threat of being sued doesn't constitute having to forfeit your trusted business name.
There are many other things I could tell you, but for the sake of brevity I'll leave it with those 2 points. I wish you luck with any future endeavors or current endeavors you may have. In my business career, currently working on company number 3, I've learned a lot of things and here are three big ones that I like to live by..
1. Never back down, never give up.
2. Don't let people push me around because of my age
3. Figure out how to politely tell lawyers to get fucked.
Good luck in the future!

Brilliant article and so very inspiring. I'm guessing the "client" was Apple? Anyway, fantastic experience no doubt. I'm also quite surprised that your Marketing plan got the grades it did, usually academic writing is very different from practical stuff (entrepreneur as well, I tried the same thing in a class and it got me diddly squat).

Amazing story and great article, Mat!
What you did is very similar to a business that I'm starting to get off the ground now, and this article is inspirational to say the least!
I've only just discovered this blog, but it's now in my bookmarks bar. I look forward to reading more about your ventures and any taking in any advice you impart.
Keep at it, it's great to see other people my age breaking out of the dead cycle of wage slavery!